By Michelle Kershner
The City of Frederick recently released "The City of Frederick Retail Report." The report was completed in April 2016 by a retail consultant and is the first comprehensive retail study completed by the city. It will assist the Department of Economic Development in identifying best practices and retail brands that are currently missing in Frederick. The report can be used as a valuable tool for both existing retailers in Frederick and for businesses considering the Frederick area.
Retail is an important community attribute for residents, businesses, and visitors alike. Retailers and restaurants contribute to Frederick's quality of life, tax base, and provide employment opportunities for residents.
The report’s executive summary stated that, “Frederick is the most unique and vibrant small city in the region in which to live and work. The City boasts low unemployment dominated by desirable and creative jobs in diverse industries with deep local roots offering family supporting wages and benefits.”There is a strong existing demand for retail and restaurants in Frederick, and opportunities remain to attract missing brands and to better understand the changing trends in consumer habits.
The report contains relevant demographic, spending, and economic data and can be used by businesses seeking to prepare or update a business plan, for property owners seeking new tenants, and for existing retailers interested in learning more about the changing trends in the retail market.
3 Key Takeaways
Frederick is Growing
The city has enjoyed continuous residential growth while many other small towns are retracting. The estimated rate of growth from 2010 – 2015 is 4.7%, above the U.S. rate of 3.3% for the same period. Projections indicate that the population will continue to grow through 2020, though at a slightly slower rate of 4.25% for a similar period (2015-2020). As the population expands, it is also getting younger. The median age drops by several years the further from Downtown you travel.
Today, 68,347 people call Frederick home including 16,347 millennials who are entering their peak spending years. The diverse residential base is well employed and educated. Over forty-percent have at least a BS degree, more than sixty-five percent hold white-collar jobs. These empty-nesters, singles and families generate over $470 million of retail demand.
The 3,400 businesses located in Frederick provide employment for nearly 49,000 workers. There are over 90,000 workers within fifteen minutes of Downtown Frederick.
The city has over 650,000 square feet of gross leasable retail space, yet there are still gaps and opportunities to establish a more diverse merchandise mix.
Specific retail opportunities include
- a grocer in Downtown Frederick
- entertainment retail uses
- general merchandise outside the core
- the cottage food industry
The study also suggests Frederick should capitalize on its reputation as a food destination. “Leverage the strong food culture that already exists in the area including agriculture and promote related business opportunities. Pay particular attention to what is commonly referred to as the cottage food industry (those individuals producing food on small scale).”
How Frederick Residents Buy by Geography (see pages 7-8)
The report analyzed spending and lifestyle trends of Frederick residents according to where they lived in reference to Downtown Frederick.
Households in the Core - Downtown Frederick (.5 miles from W. Patrick and Market Streets)
- Spend more on apparel and food away from home than other households
- When they do eat out, it’s almost 3:1 at full service restaurants as opposed to limited service eateries
- Shop at traditional grocery stores and prefer fruits, vegetables, meat and fish, and baked goods.
- They tend to watch movies at home using streaming and renting of DVDs rather than at a theater
- Highest concentration of incomes over $100,000
- Larger families with higher mortgage obligations and less overall disposable income
- Spends more on kids apparel and menswear (work and sporting wear)
- Spend more on food than Downtown Frederick
- When go out, spend money at limited service restaurants and when patronize a full service restaurant, it tends to be family-style chains
- Slightly older than the outer tier, but younger than the core
- Households are larger than the core, homes are less expensive than those in the core, incomes are slightly less, but disposable income about the same as households in the core
- Well Connected – subscriptions for movies and TV, gadgets, technology
- This category tends to spend the most on apparel, food, their mortgage, childcare and entertainment.
- Prefer natural and organic products
- Lifestyle: they work out, tend toward name brands, and happily spend money on clothes, jewelry and apparel
- Well educated and fairly well employed
Michelle Kershner is the Business Development Specialist for the City of Frederick Department of Economic Development.